What does it mean to make a choice at the margin?
Making a choice at the margin means that you are going to make your choices or decisions in small steps. It’s an economic concept you are going to run into constantly. And it’s one of those economic concepts that when applied to your college courses is going to be a huge help. In fact, making choices at the margin is repeatedly going to help you make all sorts of decisions in your life and in your career. When you use this concept, you’ll experience Economics in Action!
Here’s an example: Let’s suppose it’s Monday and in a week you have an assignment due. There are 5 questions on the assignment and you are overwhelmed.
Don’t think about the 5 questions. Completing the 5 questions on the assignment is your total goal. Instead think about the first question. The first question is your marginal goal. If you are constantly pondering the 5 questions and the five hours you anticipate needing to complete the assignment, it will take over your life. That’s not fun. So instead, think “on the margin”.
How do you think on the margin? Think about the next hour. For the next hour, you could work on one of the assignment questions. You know that if you don’t work on the assignment, you will be playing on your phone. What’s the benefit you get from spending the hour on the question? The benefit is the perfect mark you’re going to get on this question because you took the time to do it right. Now think about the cost of doing the one question on the assignment. The cost is giving up the time on your phone. Is the benefit from working on your assignment for an hour greater or equal to the cost of working on your assignment for an hour? If your answer is yes, then you work on the assignment and you’ve made your decision on the margin.
Make the same decision on Tuesday night and you’ve got the second question done. Ditto for Wednesday, Thursday, and Friday.